SPEEDVALUE: Behind the Credit Lines, Collateral Package, and Covenant Reality
SPEEDVALUE renewed NIS 14 million of credit lines in 2025 and says it remained in compliance with its financial covenants. But beneath that reassuring headline sits a tighter structure: a first-ranking floating charge over all company assets, unlimited guarantees from the core subsidiaries, and attributed equity that is almost entirely backed by goodwill and intangible assets.
What This Follow-up Is Testing
The main article already argued that SPEEDVALUE's core gap is not on the demand side. It is on cash quality. This follow-up pushes that same question one layer deeper: not how much revenue the company can produce, but what really stands between the cash balance and the common shareholders. This is no longer only a liquidity question. It is a question of priority in the capital structure.
On the surface, the picture does not look dramatic. On August 1, 2025 the company renewed credit lines totaling NIS 14 million through January 31, 2027, and at the signing date of the financial statements it had drawn only NIS 7 million. The company also states that it complied with its commitments throughout the credit-line period. In other words, there is no open covenant event here and no immediate funding wall.
But the bank did not provide unsecured breathing room. In return it sits on a first-ranking floating charge over all company assets, a fixed charge over share capital and goodwill, unlimited guarantees from Code Value and Wall Dan, and a set of limits on dividends, control changes, and intra-group cash movement. That is why the real question is not whether a facility exists. It does. The real question is how much of that flexibility actually belongs to common shareholders when 2025 ended with NIS 9.842 million of cash against NIS 11.060 million of short-term bank debt.
The Credit Line Was Renewed, but It Bought Time Rather Than Freedom
The main funding layer looks more orderly than before. The company renewed the facilities to NIS 14 million, and the last date for use was set at January 31, 2027. At the signing date of the statements, the drawn balance stood at NIS 7 million through a short-term loan carrying Prime plus 1% interest. That matters because the first message is that SPEEDVALUE still has access to bank credit. This is not a system that has already been shut out.
The second message is less comfortable: almost all bank debt remains short. In the contractual maturity table at year-end 2025, the company shows NIS 11.060 million of bank loans due within one year and only NIS 56 thousand beyond one year. So even after the renewal, the actual debt profile did not become long and relaxed. It simply stayed available for a bit longer.
That point matters because it shows that the renewed facility did not replace reliance on short bank funding. It reorganized it. The same pattern appears inside the subsidiaries. Wall Dan and Code Value together have total facilities of only NIS 1.5 million with the bank, without a binding commitment, and the bank retains full discretion to stop providing the credit. At the end of 2025 that capacity was not used for loans but for bank guarantees of about NIS 835 thousand. Numerically that is small, but analytically it says something bigger: even the operating funding layer of the core subsidiaries is not truly free. It depends on the bank's willingness to keep providing room.
That is also the difference between "there is credit" and "there is flexibility." SPEEDVALUE does have an active bank line, but it sits inside a structure where nearly all bank debt remains due within a year, and part of the subsidiary-level support is not even committed.
The Covenants Look Comfortable on Paper, but Tangible Equity Is the Sharper Test
At the parent level, the covenant package initially looks manageable: equity attributable to shareholders cannot fall below 25% of the balance sheet, tangible equity must remain positive, EBITDA cannot fall below NIS 4.5 million indexed to January 1, 2023, and the debt coverage ratio cannot exceed 3. The company explicitly says it complied with all commitments throughout the facility period.
If you stop at the first test, it is hard to get alarmed. At the end of 2025, equity attributable to shareholders stood at NIS 49.287 million against a balance sheet of NIS 106.297 million. That is 46.4%, or roughly 21.4 percentage points above the 25% threshold. On that test, the company looks comfortably away from pressure.
The issue is that right next to that covenant sits a much sharper one: positive tangible equity. And here the balance sheet looks a lot less relaxed. At the end of 2025 the group carried NIS 31.543 million of goodwill and NIS 15.486 million of intangible assets, or NIS 47.029 million combined. That is almost the entire equity attributable to shareholders.
In simple balance-sheet terms, before any adjustments embedded in the commitment letter's own definition, only about NIS 2.258 million remains. That is the core point. The company is indeed far from the equity-to-assets threshold, but much closer to the positive tangible equity test if you read the balance sheet directly. That makes the covenant more than a legal footnote. It is one of the clearest places where you can see how much of the capital structure now sits on acquisition-layer accounting.
There is another point worth noticing: the filing gives the reader the covenant thresholds, but not the real numerical cushion on each one. There is no detailed disclosure of covenant EBITDA, the debt coverage ratio, or tangible equity as calculated under the commitment letter itself. The reader gets a compliance statement, not the depth of the headroom. Analytically, that means the question is not whether there is a breach. There is not. The question is how thick the cushion really is, and the filing does not fully answer it.
Where the Banks Actually Sit
To understand what is left for shareholders, it is not enough to look at debt size. You have to look at the security map. Here the banks sit deeper than the headline "NIS 14 million of credit lines" suggests.
| Layer | What is disclosed | Why it matters |
|---|---|---|
| Parent company | First-ranking floating charge without limit over all company assets and rights, plus a fixed charge over share capital and goodwill, pari passu between the banking corporations by debt ratio | The bank sits above almost the entire parent value layer, not above one bank account |
| Code Value and Wall Dan | Unlimited revolving guarantees in favor of the banks for the parent's obligations | The two core subsidiaries also support the parent debt directly |
| Code Value and Wall Dan, at operating level | Combined equity of at least NIS 5 million and 20% of the balance sheet, combined net profit of at least NIS 1.5 million, and financing liabilities capped at 65% of receivables | The operating engines themselves are also under covenant discipline, not only the parent |
| Shareholder loans and subsidiary dividends | Shareholder loans are subordinated to the bank, the parent cannot demand repayment if that would create a breach, and any dividends from subsidiaries are meant to repay bank debt | Cash moving upstream is not free cash for common shareholders |
| Cloudax | First-ranking fixed charge over all existing and future rights to collect money from all customers | Even collection rights in part of the operating business are directly encumbered |
This is the collateral table, but there is also a control layer. If the ownership mix changes so that Eyal Zilberman and Tali Shem Tov together hold less than 60% of the share capital, or if Eyal Zilberman stops being a controlling shareholder without bank approval, the bank has the right to accelerate the debt. So it is not only assets that are tied into the financing package. Control stability itself is part of the bargain.
The most unusual clause in this whole structure is probably the subsidiary-dividend clause. The company undertook that dividends distributed by subsidiaries will be used to repay bank credit, and at the same time undertook that the annual dividend rate distributed by each subsidiary will not fall below 50% of that subsidiary's annual profit. The implication is straightforward: even if cash is generated at the operating layer, its natural path is not directly toward common shareholders. It first serves the bank.
What This Leaves for Common Shareholders
The fair read is a two-sided one. On one side, it would be wrong to argue that SPEEDVALUE is already in an acute funding event. The facility was renewed, the company reports compliance with its covenants, and the ratio between attributed equity and total assets looks comfortable. On the other side, common-shareholder flexibility is much narrower than that headline suggests.
It is narrow for three reasons. First, year-end cash still sits below short-term bank debt. Second, almost all bank debt remains inside a one-year bucket. Third, even cash produced at the subsidiary level is already pre-routed toward the bank through guarantees, charges, covenants, shareholder-loan subordination, and the requirement that subsidiary dividends repay bank debt.
That is why 2025 is better read as a year in which the company bought time to keep managing growth, working capital, and acquisition integration, not as a year in which common shareholders already regained clean capital-allocation freedom. For that reading to change, another facility renewal would not be enough. The short-term line has to become incidental rather than central, cash has to sit above short-term debt, and the tangible-equity layer has to stop looking like a thin accounting residue.
Conclusion
Behind SPEEDVALUE's credit lines there is not just a renewed bank facility. There is a full control architecture. The banks sit on all company assets, on subsidiary shares, on guarantees from Code Value and Wall Dan, on distribution limits, and on a change-of-control trigger. At the same time, the equity-to-assets covenant looks comfortable, but the tangible-equity test looks far less trivial when almost all attributed equity is backed by goodwill and intangibles.
The implication for common shareholders is fairly sharp: in 2025 the company does not look blocked, but it does not look free either. It is funded, not released. What needs to change over the next 2 to 4 quarters is clear enough: more cash above short-term debt, less reliance on revolving short credit, and a structure in which subsidiary profits start opening optionality for shareholders rather than mainly serving the bank.